As
they receive their diplomas this month, thousands of area high school graduates
are already gearing up for college life in the fall. With this next step in the
transition to adulthood, comes a real set of real-world responsibilities, and
chief among these are finances. If you’re college-bound, you’ve probably already
gone through – or soon will -- orientation designed to introduce you to time
management skills, dorm life, course requirement, campus layout and more. But in most cases, one of life’s most
important lessons – how to manage your money – is left untouched.

Credit
card companies and aggressive lenders are privy to the fact that young college
students are prone to spend more freely than their parents, so they take action
quickly. You’ll find that becoming a college freshman makes you a sought-after
customer for "pre-approved” and "pre-qualified” offers. You may even receive a
check in the mail that proves to be quick cash in your hands – at a cost, of course.

According
to a recent study, 84 percent of undergraduates have at least one credit card,
up from 76 percent in 2004. The research found that, on average, students have
five credit cards, with half holding four or more. The average balance was more
than $3,000.

"In
most cases, one credit card is enough for a young college student. There is no
magic number as to how many cards each consumer should hold, but a good rule is
to only have credit cards that you can afford to pay off each month. If you
find that you usually pay the minimum balance and all your cards are maxed out,
that’s a red flag that you have too many. A new college student simply won’t
have enough earning power to pay that balance down most of the time,” said Lyles
McDaniel, Senior Vice President with Lakeside Bank.

McDaniel
offers the following guide for college-bound freshmen as they begin to wade
through financial responsibilities of adulthood:

Open a checking
account at a local bank and learn how to balance your checkbook. McDaniel said
some banks offer special accounts designed to help college students with the
responsibilities of managing their own finances. If possible, open a savings
account as well, and start developing the habit of saving a portion of what you
earn.

Don’t be swayed by
big-print credit offers that come in the mail. "Pay less attention to the big
letters that promise zero-percent interest and pay more attention to the fine
print, which is where the real information is,” McDaniel said. "Reading fine
print should become a habit of anyone who applies for credit.”

Some financial
lenders send legitimate checks in the mail, made out in your name. It’s
understandably tempting to cash these checks, but "once again, look at the fine
print,” stresses McDaniel. "These checks usually carry hefty interest rates
that make cashing them less worthwhile.”

Use your credit
card for emergencies only, and don’t carry more cards than you can afford.

Make sure you have
a clear understanding of the interest rates on your lines of credit. If you
can’t afford to pay more than the minimum balance, don’t have credit cards.

In addition to
balancing your checkbook, make sure you keep track of your credit purchases.
Sixty percent of students surveyed were surprised at how high their balance went
and how quickly it skyrocketed. McDaniel says the same is true for debit card
purchases – track and record your spending.

Save money by
spending wisely. "One of the greatest benefits of college life is access to
free or low-cost entertainment on campus. Pay attention to those opportunities
as much as possible,” McDaniel said. If you’re fortunate enough to be on a meal
plan, be sure to take advantage. Eat on campus instead of fast food. It may
seem cheap to spend three bucks on a hamburger, but those three bucks add up
quickly. Also, learn how to grocery shop wisely. Buy generic brands, use
coupons, and comparison shop whenever possible.”

Have a budget, and
stick to it. It’s easy to lose control of your finances, especially when you’re
in college and busy with so many other things. Before you get in full semester
swing, develop a budget with estimated costs in various categories, such as
entertainment, supplies, and other expenses. Try to stay within that budget as
much as possible. "Making a budget often requires a lot of guesswork, so it’s
understandable that you may spend a little more than you planned from time to
time, but usually you can get within a reasonable ballpark.” McDaniel said.
Having a budget can greatly reduce stress because you have a general idea of
what to expect financially each month.

Understand the consequences of poor financial choices. If
you stick to minimum payments, open or apply for too many lines of credit, or
don’t pay bills on time, your credit score will be affected. This determines
what your interest rates will be on future purchases. "A low credit score costs
you money and sometimes can prevent you from making future purchases, like a
car or a home,” McDaniel
said. "So any financial mistakes you
make now, could have a big impact on your future financial situation. That’s
why learning to manage your money is so important at this stage of your life.”

McDaniel says discipline is the key to financial management for
consumers of any age, and is a lesson best learned sooner, rather than later.